Google accused of colluding with Facebook over advertising auctions

The deal was designed to "kill competition" within the market, a multi-state lawsuit claims

Google has been accused by ten US states of colluding with Facebook in an online advertising deal dating back to 2018.

The lawsuit, filed on Wednesday by Texas and nine other states, alleges that Google broke federal and state antitrust laws and engaged in “deceptive trade practices”.

According to the legal document, the tech giant “sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat, to manipulate advertising auctions”.

The deal between the two companies was allegedly agreed in September 2018 and received the internal codename Project Jedi.

Facebook is said to have had access to Google’s data and policy exceptions, enabling its advertising clients to have more ads placed than any other Google partner client. The company led by Mark Zuckerberg allegedly “understood Google’s rationale as a monopolist very well”. However, unlike Google, it isn’t named as a defendant in the lawsuit.

The legal document, which has been heavily redacted, claims that the two companies colluded to keep their deal under wraps. Google allegedly chose not to publicly disclose that it had given Facebook preferential treatment.

“Given the scope and extensive nature of cooperation between the two companies, Google and Facebook were highly aware that their agreement could trigger antitrust violations. The two companies discussed, negotiated, and memorialized how they would cooperate with one another,” the lawsuit alleges.

Commenting on the lawsuit, Digital Content Next CEO Jason Kint said that “Google (and Facebook)” shouldn't be allowed “to claim they are friends to small businesses or local journalism”.

“It's all one giant welfare reallocation being extracted by two dominant intermediaries of your personal data,” he added.

The allegations come days after California became the latest state to join an existing Department of Justice (DOJ) lawsuit that also includes 11 other states.

Filed on 20 October, it accuses Google of using anti-competitive practices in the search and advertising markets, such as locking up the search engine market by requiring it to be the default search engine for mobile devices and computers.

The lawsuit was the culmination of a year-long DOJ and multi-state investigation into Google's business practices.

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